This is interesting, but what's wrong with "Track Changes"? (a feature Word had for at least 10+ years now).
I believe for most people that is more than enough for version control purposes.
For tech people that actually know what Git is and how to use it, I bet they'd want real Git integration, or they'd choose to store the document in a different (more easily managed by Git) format such as .md or .html.
It doesn't scale. E.g. a common operation in a law firm is to send a draft of a Word document,[1] to several people for revisions and comments. You get back several redlines against a common version that some junior associate then has to integrate manually.
[1] It has to be a word document for integration with tooling that does stuff like generating tables of authorities and whatnot.
